Which of the following would shift the supply of dollars in the market for foreign-currency exchange of the open-economy macroeconomic model to the left?
A)The exchange rate rises.
B)The exchange rate falls.
C)The expected rate of return on U.S. assets rises.
D)The expected rate of return on U.S. assets falls.

Question

Quizplus · Accepted Answer

If the expected rate of return on U.S. assets rises, foreign investors are more likely to invest in the U.S., increasing the demand for dollars and reducing the supply of dollars in the foreign exchange market.

Which of the Following Would Shift the Supply of Dollars